FDIC Deposit Rule Gives Banks More Room for Business Cash
For banks seeking a larger share of their commercial customers’ operating cash, new federal deposit rules may help those efforts. The Federal Deposit Insurance Corp.’s interim final rule, adopted Aug. 27 and effective Tuesday (Sept. 1), substantially increases the amount of reciprocal deposits that qualifying banks can accept under the statutory exception from brokered-deposit treatment. […] The…
The Federal Deposit Insurance Corp. (FDIC) has introduced new deposit rules that provide banks with greater flexibility to hold their commercial customers' operating cash. The interim final rule, effective September 1, expands the amount of reciprocal deposits that qualifying banks can accept under a statutory exception from brokered-deposit treatment.
This change allows banks to accept a larger portion of a customer's deposits, up to a maximum of $30 billion, by placing portions of those deposits with other insured banks in the network. As a result, banks can maintain their relationship with the customer while distributing eligible funds among multiple insured banks. This development is particularly significant for commercial banking, as deposits are often intertwined with other services such as treasury management, payments, and credit.
The new rule empowers banks to better serve their commercial customers' operating cash needs and invest in treasury and payments capabilities to support their clients' cash flow visibility and working-capital management.
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